Fred Reish Speaks With CNBC on Potential Overturning of Retirement Security Rule Under Trump Administration

In the CNBC article, “Biden-era Retirement Rule May Be in Jeopardy After Trump Takes Office,” benefits and executive compensation partner Fred Reish provided insight on how a Department of Labor (DOL) rule aimed at protecting retirement savers from harmful investment advice could be overturned during President-elect Donald Trump’s second term. The Biden-era regulation, issued in April, looks to reduce conflicts of interest in investment recommendations from advisors, brokers, or insurance agents. The rule “makes it highly likely that rollover recommendations are subject to a fiduciary standard,” Reish said.

The rule would likely have the largest impact on insurance agents that sell “non-securities” products, which include certain annuities like indexed annuities. Those agents would likely need to assess additional factors in their rollover analyses, such as best interest practices for 401(k) plans, Reish noted. He added that investment advisors and brokers who sell securities products, such as mutual funds or exchange-traded funds, are already subject to a Securities and Exchange Commission rule issued in 2019 that is similar to the DOL rule. The DOL rule has already faced significant legal challenges, the article noted, with two federal courts halting its implementation. Reish said that the Trump administration could simply not defend the case, effectively abandoning the rule in their efforts toward deregulation.

“None of that is certain,” Reish added. “We don’t know if conservative Republican philosophies will prevail on any given issue, or whether a populist approach would prevail.”